On behalf of Periconi, LLC posted in Fracking on Monday, November 21, 2011.

In our first two posts (here and here) in the Fracking NY Blog Series, we considered the general background of fracking in the Marcellus Shale region of New York and the 2011 Revised Draft Supplemental Generic Environmental Impact Study ("Revised Draft SGEIS") prepared by the New York State Department of Environmental Conservation ("DEC") which studied the environmental impact of allowing fracking in New York State. This post discusses the draft DEC regulations that were released in September of this year that would regulate high-volume horizontal hydraulic fracturing, or "fracking," in New York State.

Draft DEC Regulations

The complete proposed changes to the DEC regulations may be found here, and the Draft SPDES General Permit may be found here. Comments on the DEC Regulations and Draft SPDES General Permit are due to the DEC by December 12, 2011.

On September 28, 2011, DEC released its proposed rulemaking that would modify DEC's existing regulations and promulgate new regulations related specifically to the use of fracking, found at New York Codes, Rules, and Regulations (NYCRR), Title 6. The DEC's proposed rulemaking follows the conclusions and recommendations contained in the Revised Draft SGEIS.

Most importantly, the DEC has drafted a new rule, 6 NYCRR Part 560, which would regulate fracking operations in the State, based upon the findings in the Revised Draft SGEIS. This new rule is an attempt to have a comprehensive regulatory scheme for fracking and includes, among other things: the need for a blowout preventer use and testing plan; detailed mapping requirements; disclosure of chemical additives; well pad siting setbacks; as well as detailed application, well construction, site preparation, operational (including testing, recordkeeping, and reporting), maintenance, and reclamation requirements for all fracking wells in New York.

In addition to the new fracking rule, the revisions and amendments to DEC's existing oil and gas well rules under 6 NYCRR Parts 550-555 include, for example: clarifying language to Section 552.2 to specify that the expiration of a permit to drill, deepen, plug back or convert a well does not relieve an operator from compliance with the terms in a permit once operations have commenced; removal of a cap on financial security requirements for wells longer than 6,000 feet; updates to statewide spacing regulations; and enhancements to DEC's minimum requirements for the plugging and abandonment of wells.

Because the proposed fracking regulations are directly based on the DEC's recommendations in the 2011 Revised Draft SGEIS, the regulations, if adopted as currently written, will likely generate the most opposition on the same points as the SGEIS. As we mentioned in our previous post, two of those issues include:

1. "Proprietary" chemicals are not required to be disclosed to federal regulatory agencies and the DEC's proposed regulations - while they do require full disclosure of all chemicals - only require disclosure to the DEC, rather than the public generally if the well operator requests these chemicals to be exempt from public disclosure, and such chemicals would not be made available through the State's Freedom of Information Law ("FOIL").

2. Much of the Delaware and Catskills River Watersheds, which provide unfiltered drinking water to millions of residents in New York City and parts of New Jersey and Pennsylvania, is underlain by, and thus could be impacted by development in, the Marcellus Shale formation. The proposed regulations, like the Revised Draft SGEIS, attempt to deal with this controversial issue by prohibiting fracking within 4,000 feet (less than one mile) of these watershed areas, and within 2,000 feet (less than one-half mile) of public water supply wells, river or stream intakes, and reservoirs.

It is likely that opponents of fracking in New York will challenge these regulations as not going far enough, while proponents of fracking may challenge these regulations as going too far.

In addition to the new fracking regulations and amendments to the oil and gas well regulations, DEC also proposed changes to the State Pollution Discharge Elimination System ("SPDES") regulations, as well as a new section specifically relating stormwater requirements for fracking operations. These SPDES regulations regulate activities that damage or otherwise adversely affect the waters of New York and authorize DEC to conserve and control water resources of the State for public health, safety, or welfare, through the promulgation of water quality standards and the issuance of SPDES permits.

The new fracking SPDES regulations, found at 6 NYCRR Part 750-3, would prohibit certain fracking activities and discharges, and would prevent the issuance of a SPDES permit for such activities or discharges within the following specified distances from water resources: within 4,000 feet of an unfiltered surface water supply watershed; within 500 feet of a primary aquifer; and within 100 year floodplains.

The proposed changes to 6 NYCRR Part 750 also specify the conditions under which an applicant may receive a SPDES permit for fracking activities, including: a list of certifications required by the applicant; the need to develop a comprehensive stormwater pollution prevention plan; construction, reclamation and drilling requirements for high-volume hydraulic fracturing wells; requirements that all flowback water and production brine will be treated, recycled or otherwise disposed of; monitoring, reporting and recording requirements; and testing requirements for residential water wells. Consistent with these new regulations, DEC has issued a Draft SPDES General Permit for Stormwater Discharges which will authorize point source discharges to waters of the State from fracking operations.

Finalization of the DEC's Fracking Regulations Will Not Be the End of the Controversy...

The truth is that many opponents of fracking in New York State will oppose these regulations because they are not a complete ban on fracking, while many proponents of fracking will oppose these regulations as being overly burdensome. A challenge to the DEC's regulations is almost a foregone conclusion, whenever they are finalized and whatever they say.

***Our next post in the "Fracking NY" blog series will focus on the federal regulation - or lack thereof - of fracking.

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